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Jeff Cooper: Why SPX Could Hit 2482

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Our report yesterday stated that after month-end cross-currents, there would be no excuse for momentum not to show up. It did.

The longer I'm in this game, the more I am surprised about how professionals can look at the same tape and see two diametrically opposed pictures.

One fellow technician said the tape looked tired yesterday and momentum was noticeably absent.

Never underestimate the lure of confirmation bias.

Perhaps this gentleman was looking at the usual suspects, the FAAT Cats like FB, AMZN, AAPL and TSLA yesterday and seeing a lackluster tape without leadership. I saw a tape that was broadening out.

I saw a tape with many glamours on fire. Names include TTWO, EXAS, ZBRA and PFPT to mention a few.

Other glamours like OLED, SHOP and  looked poised to pivot to new highs.

Runaway names continued to run. Names include BYSI, ECL and LABL.

Even some big cap names like MCD are in parabolic ascents.

Beaten up biotechs chimed in like, BLUE, CLVS, and CELG picking themselves up off the floor.

Dogs like GME, ZOES, GS and SIG were barking.

The energy stocks came up for air as well.

IWM followed through from Wednesday's Lizard buy setup.

It was truly a momentum day across the board.

Above I stated that the tape was broadening out at the expense of the heavy-weight fat cats like FB, AMZN, AAPL and TSLA.

While it could mark the beginning of a new leg, I think it marks the beginning of the end.

The presumption is that cats and dogs would come to life in a late stage breakout.

In other words as noted last month, this looks like a perfectly orchestrated Feeding the Ducks scenario.

Yesterday's explosion was right ‘on time'.

It came 90 days/degrees from the important March 1 pivot high.

Thursday's explosion followed a picture-perfect Plus One/Minus Two buy pattern that backtested the breakout line and filled a gap in the process.

Like it or not, we're in the pattern recognition business. Believe what you see.

While Wednesday morning, the idea of reaching our primary target of 2482 on June 6 seemed the short straw.

Not so much anymore.

Can the SPX add on 52 points in 3 days?

As you know, 2482 has been a long outstanding projection.

To recap, it is 12 squares or revs of 360 degrees up from the 666 low from 2009.

It is 6 squares up from the May 2008 pre-crash pivot high of 1430-1440.

Said another way, the '08-'09 crash was a cube, 6 squares of price.

2482 should be important.

2482 aligns with/vectors June 6. So this is an idealized date for a perfected square-out to take place.

However, it is always ‘the week of'.

At the same time remember that June 6 is a Master Square in time, as shown recently.

June 6 also vibrates off 62 which was the SPX low in 1974.

That was 43 years ago and basically 43 years prior was the Great Depression low.

This is the low to low to possible high cycle we've flagged.

Additionally, it's interesting that the first leg up off the mid-May low was 66 SPX points.

A Measured Move of 66 points from Wednesday's pivot low of 2403 gives 2469, close to our 2482 idealized projection.

On the above SPX, note the 3 higher lows since late March that undercut the 50 day moving average.

As you know, fast moves are often derived from 3rd high lows.

There is every reason to believe the SPX is in a fast continuation move.

In my experience runaway moves to square-outs underscore their potential significance.

This was true at the October 2007 square-out high.

it was true at the March 2009 square-out low.

Today is 90 degrees s square 2434.

Based on the futures, the index should open around this level.

If exceeded and held, especially on the Friday weekly closing basis, there should be nothing between here and 2482.

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1 comment
Marty Dim says June 4, 2017

On May 17, it seemed likely the train was coming off the tracks, now we are going to 2482, but will fail at some point later?

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